Amendment to the Terms of Convertible Loan Stock December 2017

Sopheon plc (“Sopheon”, the “Company” or the “Group”) announces that it has reached agreement with the holders of its remaining £1.94m of convertible unsecured loan stock (the “Loan Stock”) to convert it into equity by the end of 2017.

As previously announced, in 2009 and 2011, the Company issued a total of £2m of Loan Stock to a group of investors including members of the Board and senior management team. The Loan Stock, which carries an interest coupon at a rate of 8 percent per annum, is currently due to mature on 31 January 2019, and has a conversion price of 76.5p per ordinary share of 20p each in the Company (“Ordinary Shares”). Board members with an interest in the Loan Stock are Barry Mence (£640,000), Andrew Michuda (£45,000), Arif Karimjee (£27,000) and Stuart Silcock (£200,000). Rivomore Limited, a current substantial shareholder in the Company, has an interest in the Loan Stock of £640,000.

Proposals have yesterday been put to the holders of the Loan Stock that would reconstitute the instrument such that it would automatically convert to equity on 22 December 2017, at the conversion price stated above, resulting in the issue of 2,535,947 new Ordinary Shares. This change will improve the profile of the Group’s year end balance sheet and simplify the capital structure, as well as eliminating the interest charge going forward. In conjunction with this proposed amendment, a one-off payment of 8 percent of the face value of the Loan Stock will be made to holders of the Loan Stock in cash amounting to approximately £155,000, in recognition of the loss of their interest and repayment rights as a result of the early conversion. Irrevocable undertakings have been received from holders representing almost £1.7m of the Loan Stock, being over 85 percent of the Loan Stock in issue, to vote in favour of a resolution to authorise the amendment of the Loan Stock instrument as described above at a forthcoming meeting of the Loan Stock holders on 22 December 2017 (the “Meeting”).

The modification of the terms of the Loan Stock constitutes a related party transaction for the purposes of AIM Rule 13. In accordance with the AIM Rules for Companies, Daniel Metzger, as the director independent with respect to this transaction, having consulted with the Company’s Nominated Adviser, finnCap Limited, considers that the amendment to the terms of the Loan Stock are fair and reasonable insofar as the Company’s shareholders are concerned.

Following formal approval by Loan Stock holders at the Meeting, application will be made for the 2,535,947 new Ordinary Shares to be admitted to trading on AIM, and dealings expected to commence on 27 December 2017. The new Ordinary Shares will rank pari passu with the Company's existing Ordinary Shares. A further announcement will be made following the Meeting.

Sopheon’s Chairman, Barry Mence said:

“I am delighted and grateful that our convertible loan stock holders have continued to show such solid support for the Company, as they have through the last several years of our development as a business. With these changes we will enter 2018 with a clearer capital structure and an enhanced balance sheet.”

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Sopheon (LSE: SPE) partners with customers to provide complete enterprise innovation management solutions including software, expertise, and best practices, that enable them to achieve exceptional long-term revenue growth and profitability.  Sopheon’s Accolade solution provides unique, fully-integrated coverage for the entire innovation management and new product development lifecycle, including strategic innovation planning, roadmapping, idea and concept development, process and project management, portfolio management and resource planning.  Sopheon’s solutions have been implemented by over 250 customers with over 60,000 users in over 50 countries. Sopheon is listed on AIM, operated by the London Stock Exchange.

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.